Investors urge Kohl’s to boost stock or sell

Kohl’s is facing demands from Macellum Advisors to bolster its failing stock or seek ways to sell the business, The Wall Street Journal (WSJ) reported Monday (January 17th).

According to the WSJ, Macellum — who owns about 5% of Kohl’s equity — urged the company to make several changes, including adding shareholders or directors with sales experience to the board.

Kohl’s hasn’t been receptive so far, but the hedge fund plans to try again. According to Macellum, if Kohl’s does not change its board of directors, the company should hire bankers to explore a sale. Macellum told Kohl’s that there are potential buyers who have expressed interest in the idea.

In a statement, Kohl’s said it was reviewing all opportunities and the performance it had from 2021 showed the strategy was working.

Kohl’s shares rose for several months in early 2021, although they are now trending lower as activists reached a settlement agreement in April 2021. The company said it plans to share details about its strategic initiatives starting March 7, its investor day.

Macellum, alongside other activist investors with a stake in Kohl’s, appointed nine directors early last year, urging Kohl’s to monetize its real estate and change the way it operates.

Kohl’s reverted several changes over the past year and strengthened its stock buybacks, and invested in a new partnership with Sephora, updating more than half of its more than 1,000 stores.

Last month, PYMNTS reported on demands for a spin-off from Kohl’s, which has faced friction amid a shift to omnichannel retail, with activist investor Engine Capital saying it wants to see a split between the physical and retail activities.

Related: Breaking up Kohl’s is about valuation, not great omnichannel retail execution

PYMNTS noted the disconnect between the Wall Street sum of extracting value from its coins and the work of those on the front lines who work to source and display goods and clothing.

Engine Capital said its main reasons for wanting the split boiled down to a lack of shareholder value.



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